With all the strains on library budgets nowadays, it seems odd that libraries are soon to be asked to take on even more responsibility for purchasing appropriate materials for their institutions. It seems odder still that some librarians welcome this expanded role.
As a consumer of content, a university community is a rare bird. Not only do universities consume materials that have little audience outside the academy (e.g., some research journals), they also consume textbooks (a $7 billion industry), scholarly monographs, and huge numbers of trade books, as even the most distinguished professor may choose to curl up with a mystery novel in the evening. You can tell you are in a university town simply by looking at the bookstores. For starters, university towns still have bookstores, even with so much book commerce being conducted over the Internet nowadays; and the bookshops, which often include a wide array of used books, display titles that you are unlikely to find in a town without a large intellectual community.
And beyond books, university towns have movie theaters (art houses as well as first-run megaplexes), concerts, public lectures, and just about any content type you can imagine. I have never seen anyone try to put the figures together, but I would not be surprised to learn that a university town consumes 10 times the amount of content of a non-university town of the same size.
No one would expect the university library to manage all these content types in its collection. The novels of Stieg Larrson are well and good, but do they belong in an academic library? Books on preparing taxes, movies about vampires, late-night rock concerts: these may fall outside a library’s purview. If it were otherwise, what reduction would there be in the budget for purely academic material? Who would want to see JAMA or the Lancet cancelled because the money is going to the Guido Brunetti mysteries by Donna Leon or the romances of Georgette Heyer? (Both authors simply must be read, but not necessarily at the library’s expense.) A library is thus not the sole purchaser and curator of content for a university community; it is but one purchaser among several; its reach is not comprehensive nor is it intended to be.
Outside of purchasing in an individual’s consumer capacity (that is, purchases that are not professional in nature, such as of the Wallendar novels of Henning Mankel), there are three primary sources of revenue for content acquisition in the academic community: libraries, of course; students, who buy texts for classes; and faculty and staff, who buy books and serials for professional reasons. If libraries were to take on the responsibility of making purchases for students and for the faculty and staff whose current purchases go beyond a library’s collection policy and resources, the bill would be a considerable one. But this has been happening for some time and is likely to become an even more conspicuous dimension of campus content.
Let’s consider a hypothetical university press, with sales of $5 million a year. Where do those sales come from? Perhaps 25% or $1.25 million comes from library purchases. Another 25% is likely to come from course adoptions. That leaves 50% that comes from other sources. Let’s take 10% off the top for export sales (and not inquire where those exports eventually end up, whether in a library, in a student’s dorm room, or next to the reading chair of a member of a university faculty), leaving us with 40% or $2 million. Some of that money comes from individuals unaffiliated with a university — and there are such bookish persons, but there aren’t that many of them. Most of that 40% goes to individuals with a university affiliation. For purposes of discussion, let’s say that three-fourths of individual (non-student) purchases are to members of the academic community, which comes to 30% of total university press sales. So, 25% to libraries, 25% to students, and 30% to faculty and staff, for a total of 80% of a university press’s total revenue.
In a print world, libraries are only paying for 25% ($1.25 million in the example above) of a university press’s total revenue, but when things become digital, that percentage rises, or at least the presses have a strong need to make it rise. Consider an e-book purchased by a library for $20. Now the same book is adopted by an instructor for a course. There are 30 students in the class. The publisher hopes for a sale of all 30 books, though that is optimistic; but if the publisher’s dream came true, the course adoption would yield about $600 at retail. (After working through all the slices taken by participants in the supply chain, the publisher is likely to receive about $400 of this for academic titles, about $300 for trade titles.) The publisher’s ideal scenario is that the library’s expenditure would be $640: $20 for the library copy, $20 for a copy sold to an individual faculty or staff member, and $600 for the course adoption. But in fact the library’s actual expenditure only comes to $20.
The drop in the university press revenue is devastating. I will forebear running through the entire financial analysis here, but the drop comes to about 55% of total revenue spread across all presses and all campuses. For the $320 million U.S. university press book market, that comes to approximately $175 million. It is highly improbable that the parent institutions would want to make up the difference, even if they could.
How can this be? Very simply, the reason is that unless the e-book that the library purchases is restricted in some way through a form of digital rights management (DRM) software, the purchase of a single copy by the library now satisfies readers’ needs that were formerly comprised of three different groups (library patrons, students, and faculty and staff making individual purchases). A library may welcome this responsibility, but may change its mind when the bill comes due.
Readers of this blog will have realized that the issues expressed here are active in the current Georgia State litigation. In that case, Georgia State is saying that one copy of a book can be used by all members of the community for all purposes, whereas the publishers are insisting that an institution has multiple uses and that each kind should carry a tariff. The courts will decide which party is right.
The difficult thing about this kind of situation is that, whatever happens at Georgia State, it is an honest conflict between libraries and publishers, for which there is no clear or fair solution. No publisher, and certainly no university press, can withstand a 55% drop in revenue. (Moving to a digital-only solution, for which the marketplace is not ready, could lower costs by 20%.) Nor can libraries hope to pay what publishers think they should for digital copies (slightly more than 300% of the cost of a print copy — because the library, formerly 25% of volume, is now supporting 80% of volume). Thus a library wants to purchase for $16 an electronic edition of a print book priced at $20, whereas the publisher wants to charge $65.
Much discussion of this topic is heated — and it can and does lead to litigation. But if we turn down the temperature for a moment, we will see that digital media destabilizes how we conduct business and that the conflict derives not from individuals but from a shifting environment.
There are economic benefits to be gained from the migration to digital media, but to which institutions should those benefits accrue?